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Italian Premier Says 2019 Growth May Reach 1.5% Despite Risks

(Bloomberg) -- Prime Minister Giuseppe Conte brushed aside fears Italy is headed for a recession, insisting that economic growth could climb as much as 1.5 percent this year and ruled out any need for a budget adjustment to meet targets.

Key measures in the populist government’s budget are now taking effect, Conte told Bloomberg Television’s Francine Lacqua in an interview at the World Economic Forum in Davos on Wednesday. They include structural measures and a plan to kick-start struggling investments.

“I am very confident that our economic growth will be much higher than foreseen in the budget law,” Conte said, adding that compared to a previously forecast 1 percent growth. “I suppose it will be 1.2, 1.5. I am confident of that.”

Conte last month said he considered 1 percent growth a “minimum threshold.” Both the Bank of Italy and the International Monetary Fund view that forecast as too optimistic, saying they expect 0.6 percent growth this year in Italy.

Investor Concerns

In the Bloomberg interview, Conte dismissed concerns by investors that Italy may need a budget adjustment if an economic slowdown pushes Italy above its budget deficit of just slightly over 2 percent of gross domestic product.

“We didn’t discuss any corrective action so far, because we just approved the budget law last December. We are at the beginning of the New Year, it is too early for these provisions,” Conte said.

Making his debut at the annual elite forum in the Swiss Alps, Conte echoed attacks by his government’s populist leaders, Deputy Premiers Matteo Salvini and Luigi Di Maio, on France and Germany over issues including migrants from across the Mediterranean.

Asked about outbursts by Salvini, who has blasted French President Emmanuel Macron on the migration issue, Conte said he was running out of patience with the European Union’s long-running failure to share the burden with Italy.

“If things go on like this, I’ll refuse to discuss immigration at European Council meetings, if there is a refusal to take action,” Conte said.

Salvini and Di Maio have been jostling each other, as they compete ahead of European Parliament elections in May, with attacks on both Macron and on German Chancellor Angela Merkel. The Bank of Italy has cut its growth forecasts and signaled that the euro region’s third-biggest economy might have slipped into recession at the end of 2018.